Living Together: The Economics of Cohabitation

Executive Summary

Cohabitation is an increasingly prevalent lifestyle in the United States. The share of 30- to 44-year-olds living as unmarried couples has more than doubled since the mid-1990s. Adults with lower levels of education—without college degrees—are twice as likely to cohabit as those with college degrees.

A new Pew Research Center analysis of census data suggests that less-educated adults are less likely to realize the economic benefits associated with cohabitation. The typical college-educated cohabiter is at least as well off as a comparably educated married adult and better off than an adult without an opposite-sex partner. By contrast, a cohabiter without a college degree typically is worse off than a comparably educated married adult and no better off economically than an adult without an opposite-sex partner. (Most adults without opposite-sex partners live with other adults or children.)

Among the 30- to 44-year-old U.S. adults who are the focus of this report, 7% lived with an opposite-sex partner in 2009, according to census data. The share is higher among adults without a college education (8%) than among those with college degrees (4%).

The proportion of adults who ever have cohabited is much larger than the share currently cohabiting, and it has grown to become a majority in recent decades, according to data from the National Survey of Family Growth. Among women ages 19-44, for example, 58% had ever lived with an opposite-sex unmarried partner in 2006-2008, up from 33% among a comparable group in 1987 (National Center for Marriage and Family Research, 2010).

This report finds that greater economic well-being is associated with cohabitation for adults with college degrees, but not for those without college degrees. The measurement used for economic well-being is median household income, which in this analysis has been adjusted for the size of the household and standardized to a household size of three.

Among college-educated adults, the median adjusted household income of cohabiters ($106,400 in 2009) slightly exceeded that of married adults ($101,160) and was significantly higher than that of adults without opposite-sex partners ($90,067). However, among adults without college degrees, the median adjusted household income of cohabiters ($46,540) was well below that of married couples ($56,800) and was barely higher than that of adults without opposite-sex partners ($45,033).

The Pew Research analysis finds that differences in employment rates and household living arrangements of cohabiters with and without college degrees help explain gaps in their comparative economic well-being. These differences include:

Among the college-educated, two-earner couples were more prevalent among cohabiters (78%) than married adults (67%) in 2009. By working more, cohabiters offset married adults’ higher median earnings.

Among those without college degrees, two-earner couples were slightly less prevalent among cohabiters (55%) than married adults (59%) in 2009. In addition to being more likely to work, these married adults have the advantage of higher median earnings.

Among the college-educated, a much higher share of married adults (81%) than cohabiters (33%) lived in a household with children in 2009. In addition, among those with children in the household, married adults tend to have more children. The greater presence of children in married-couple households may help explain the lower share of two-earner couples among married adults.

Among adults without college degrees, the majority of both married adults (85%) and cohabiters (67%) have children in the household. The relatively large presence and number of children in the households of cohabiters without college degrees may reduce the extent to which both partners in such relationships can earn income.

Whatever their partnership status, adults in households with children have significantly lower median household incomes than comparably educated adults in households without children. Cohabiting adults without college degrees are much more likely to be in a household with children than are college-educated cohabiters, diminishing their potential economic gains from cohabitation.

The earnings of college-educated adults who live without opposite-sex partners constitute the bulk of their household income (88%). A college-educated cohabiter’s earnings typically make up 50% of the household income, suggesting that those who move in with a partner obtain a net boost to their household incomes.

Among adults without college degrees, earnings of those who live without opposite-sex partners constitute 43% of their household income. Earnings of cohabiters make up 42% of household income, suggesting that those who move in with a partner do not obtain a net boost to their household incomes.

Among adults who live without opposite-sex partners, differing household composition helps to explain why those with college degrees typically gain an economic boost from cohabitation but those without college degrees do not. Most of these adults live with others, such as their own parents, their children or roommates. The college-educated without opposite-sex partners are more likely to live alone (44% to 20%). They are less likely to live with other family members who may supply some of the household income—income that may be lost in a transition to cohabitation.

A voluminous body of social science research shows that marriage is associated with a variety of benefits for adults. In the words of one researcher: “For well over a century, researchers have known that married people are generally better off than their unmarried counterparts” (Nock, 2005). Yet in recent decades marriage rates have declined—particularly among less educated adults—as cohabitation rates have increased.

It also would seem that cohabitation would be associated with greater economic well-being than living without a partner because of the economies of scale achieved by combining two households. Yet adults without college degrees who cohabit are no better off than those who live without opposite-sex partners.

The findings in this report suggest that cohabitation plays a different role in the lives of adults with and without college degrees. For the most educated, living as an unmarried couple typically is an economically productive way to combine two incomes and is a step toward marriage and childbearing. For adults without college degrees, cohabitation is more likely to be a parallel household arrangement to marriage—complete with children—but at a lower economic level than married adults enjoy.

This report uses U.S. Census Bureau data to analyze the economic and household circumstances of opposite-sex cohabiters ages 30-44 as well as those of comparably educated married adults and adults without opposite-sex partners. The age range was chosen because it is a time of life when most adults have completed their education, gone to work and established their own households.

About 400,000 adults ages 30-44 are partners in same-sex unmarried couples, according to the 2009 American Community Survey, compared with 4.2 million who live with a partner of the opposite sex. Same-sex couples have distinctive patterns of income, education and household composition. They have higher median adjusted incomes ($99,204) than opposite-sex cohabiters ($54,179), married couples ($70,711) or adults without partners ($53,399). About half (48%) are college graduates, a notably higher share than for other adults. Less than a third (31%) live with children, a lower share than opposite-sex cohabiters.

The analysis of cohabiting couples in this report is restricted to opposite-sex unmarried partners. The analysis makes the assumption that these couples have the choice to marry or cohabit, which is not the case for most same-sex couples. There also is a dearth of data on marriage trends among same-sex couples, for whom the option to marry only recently became available in a limited number of venues.

In this report, same-sex unmarried partners are included in the category of adults with no partner. Although same-sex couples and adults with no partner differ in income, education and household composition, combining them in the same category does not change the findings about the relative economic conditions for adults in the three partnership status groups.

The first section examines the prevalence and growth of cohabitation, compared with marriage or living without a partner, by educational attainment. The second section analyzes the economic outcomes of adults by partnership status and educational attainment. The third section examines adults’ labor market characteristics to understand the comparative patterns of economic well-being. The fourth section looks at some differences in the types of households in which these adults live—again, by partnership status and educational attainment.

ABOUT THE REPORT

This report was researched and written by Richard Fry and D’Vera Cohn, senior economist and senior writer, respectively, of the Social & Demographic Trends project of the Pew Research Center. The report was edited by Paul Taylor, executive vice president of the Pew Research Center and director of the Social & Demographic Trends project. Research associate Wendy Wang assisted with charts and editing. Research analyst Gabriel Velasco helped with the preparation of charts. The report was number-checked by Daniel Dockterman, Pew Research Center research assistant. The report was copy-edited by Marcia Kramer. The Center appreciates the comments of outside reviewers Wendy Manning of Bowling Green State University and Adam Thomas of the Brookings Institution on an earlier draft.

The main data source for this report is the Census Bureau’s 2009 American Community Survey, which supplied data about partnership status and other individual and household characteristics for adults ages 30-44. The Census Bureau’s Current Population Survey is the source of data about long-term trends in the prevalence of cohabitation. For more detail, see the Appendix.

TERMINOLOGY

“College-educated” refers to persons who report that their highest education is at least a bachelor’s degree. Persons whose highest education is an associate’s degree or “some college but no degree” are included with not college-educated adults in this report.

A “two-earner” or “dual-earner” couple refers to a relationship in which both partners were employed at the time of interview.

“Living with children” refers to living with one or more own children (of any age or marital status), that is, living with step-children and adopted children as well as biological children, as well as living with any own children of their partner. Most are under 18.

The category of adults not living with a partner includes same-sex couples. Cohabiting couples consist only of opposite-sex couples.

About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping America and the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts.